The government has fired the starting gun on consultations for its new Employment Rights Bill. This wide-ranging legislation is part of Labour's ‘Plan to Make Work Pay’. It will bring forward 28 individual reforms, including: 

• Banning exploitative zero-hours contracts
• Ending ‘fire and rehire’ and ‘fire and replace’
• Making parental leave, sick pay and protection from unfair dismissal a day one right
• Strengthening statutory sick pay
• Making flexible working the default from day one
• Strengthening protections around collective redundancy
• Establishing a new enforcement body, called the Fair Work Agency
• Upgrading Trade Union legislation.

The government is pushing many of the reforms through parliament: the Bill has already had its second reading and goes to the House of Lords when the debating stage finishes at the end of January. Items not in the current bill, such as changes to employment status, will go out for consultation in 2025 with legislation expected in 2026.

The legislation is separate to the recent Budget announcements of increases in employment National Insurance Contributions and national living and minimum wages. 

Ian Anfield, managing director of Hudson, said: “The changes to tax and employment law will make it very hard for smaller businesses to take on employees under PAYE, especially those with an uncertain workload like construction firms. 

“The new government understandably wants to get Britain working but the combination of policies seems likely to have the opposite effect.

“As currently drafted, none of the changes will affect self-employed construction workers paid under CIS. However, we expect that policymakers will try to push the new burdens onto users of the self-employed as well, probably by complicating status tests so HMRC and tribunals can find that more self-employed people should have been treated as employed. 

“It's more important than ever that construction firms choose the right provider. Hudson is the only one of its kind that is legally tested and has the most resource to get compliance right.”